Suppose the Super Bowl is this week, and Sam is in need of a television to watch the big game. As a college student, Sam knows that he can either buy his flat-screen television at the local electronics store, or he can shop online for a better deal but have to wait three days for the television to arrive. The following problem uses the economic concept of rate of time preferenceto help determine which decision is better for Sam. Throughout the question, assume that Sam pays for the good the day he buys it, so his wealth is affected in the initial time period no matter where he buys the good. Also, assume the shipping cost and cost to travel to the store are incorporated into their respective given prices. Finally, assume the goods are identical, and there's no cost to gaining information about pricesin other words, he knows the best price online and in the store without having to search.Suppose Sam receives a utility of 19.45 utils once he actually receives his television. Let indicate Sam's patience level; that is, represents the discount rate between consuming something today versus tomorrow.

For each value of in the following table, compute the present value of Sam's utility from receiving the television when he purchases his television in the store (and receives it today) and when he purchases it online (and receives it three days from now).

Where Purchased	Present Value When . . .
=0.8	=0.6	=0.4
Store (received today)
Online (received in three days)

If Sam buys his television in the store, it costs $500; whereas if he buys it online, it costs only $370. Suppose the utility Sam receives as a function of his wealth can be expressed in the following way: U(W)=W0.7U(W)=0.7. If Sam's level of wealth is $1,200 before purchasing a television, his utility from wealth will be (62.77, 98.08, 182.52, 77.50, 110.50) utils if he purchases his television in the store, or (182.52, 77.50, 98.08, 172.64, 110.50) utils if he purchases it online.

Assume Sam's total utility from purchasing a television is the sum of the present value of his utility from consumption and the utility from his remaining wealth.

For each level of , complete the following table with Sam's totalutility.

Where Purchased	Total Utility When . . .
=0.8	=0.6	=0.4
Store
Online

From the previous analysis, you can conclude that as increases, consumers become patient. This indicates that as approaches one, consumers are more likely to purchase the good .